THE CARGO LETTER 
Air & Ocean Freight Forwarder - Customs Broker News
20 September 1996
Good Friday Morning from our Observation Deck...... overlooking the officially designated "Cargo City" area and....... Runway 25-Right at Los Angeles International Airport.
Just returned from our next trip to the Far East, we are even more convinced that freight forwarder education & communication plays a central role in both the success of our our industry and in relations with overseas customers & agents. Many thanks to our host, President L.S. Kim of Asiana Express of Los Angles & Seuol, a leader in Asian air & ocean forwarding (LAX/SEA/JFK/BUE,et al).
Some of our articles are longer than usual in this edition, but we think the information helpful, especially if you are to understand new industry developments where the powerful internet tool is concerned. Also, our article from "Down Under" Correspondent Robert Conway, Esq. may save you claim $s in S.E. Asia.
Contribute your knowledge & experiences to The Cargo Letter. McD
OUR "A" Section: FF World Trade, Financial & Inland News
Somber Transit Times For Africa...........as our The Cargo Letter Correspondent Pete Bower of Freight World, South Africa's only magazine on freight management, sadly reports that road & rail infrastructure north of SA continues to deteriorate to the point of major world concern. The Zimbabwe system, for example remains serviceable; Zambia is a bit worse; Southern Zaire impossible; Malawi almost unusable.....with Tanzania dreadful and Kenya not much better. Regional strife has all but eliminated reliable service for Rwanda and Burundi. These problems also apply to telecommunications, which are required by railway authorities, for example, to transfer traffic information. Our Correspondent Pete Bower will be providing a full report to The Cargo Letter. If this area of the world is to have hope.......it must have transportation. While the world remains focused on the welfare of people of in this area.......we all know that transport & trade hold a key to the future.
Circle To Launch Internet Global Tracing &Tracking___and is currently
testing its system with selected clients for estimated roll-out later this
month.........with access from it's internet web site at
APL Also Launches Customer Freight Tracking...... ....and has announced its "second generation" World Wide Web (WWW) Page......http://www.apl.com......... organized to follow the typical transportation order cycle, including an interactive review of vessel and stacktrain schedules; requesting a booking; printing a bill of lading and tracing a shipment to its destination. APL has added express log-on options that provide faster access to tracing, booking and other transactions. Customers can enter and trace multiple shipments with a single query, 24 hours every day. APL's Website may be especially helpful on quota cargo that has been cleared on the U.S. West Coast and is in transit. North American export customers now can now obtain negotiable bills B/Ls by printing them out on their office printer (security steps are in effect), instead of relying on overnight courier services. As a continuing The Cargo Letter theme, we remind YOU that customers such as garment importer Polo are using this service directly.......as certain carriers (mainly air) continue to move toward the retail market......the freight forward's market. Consider.
Expeditors Makes Clean EU Sweep.............as Rotterdam, the Netherlands and Vienna & Salzburg, Austria earn ISO 9002 certification, making all 24 of its Western European offices accredited by Bureau Veritas Quality International.
Philippines Has A Happy Face.........with foreign trade growing by 23% to US$29.7B since Jan '96. An area to watch. Major increase area........ with Japan.
Professional Help Wanted ............by Countryman & McDaniel Law Offices LAX, a 5 to 8+ year experienced CA & Federal litigation attorney to head transport litigation department. Reply to........ CargoLaw@aol.com
OUR "B" Section: FF World Air News
The internet now has a new "Usenet" newsgroup for the air cargo & freight forwarding industry. You may know that a "newsgroup" is a sort of internet information exchange where members post messages and questions for general interest and discussion within the group. As posts are made to the group a copy is routed to your email address.....for those members lacking WWW or Usenet access.
While the air industry has enjoyed wide exposure on the internet, this has been limited to discussion of recreational flight & general passenger airline information. With air cargo making up more than 35% of the total value of all goods shipped anywhere in the world, it was clear that a newsgroup dedicated to the air cargo & freight forwarding industry was needed to address........ 1.) cargo operations of domestic & international air carriers, 2.) interests of small package air freight companies, and 3.) air related interests of the freight forwarding community . This month Michal Douglas, Jim Powell, Martin Brennan and loyal supporters filled an important industry need by establishing the "m.t.a-i.c. mailing list" As a founding member of the new group, The Cargo Letter is pleased to report that you will receive a variety of practical tips regarding carriers, routes, haz mat, regs, etc. You are also able to pose questions and have them answered by leading experts in our field.
The CHARTER of
The group is moderated by air cargo & freight forwarding experts to
eliminate repetitive, redundant, illegal, invalid, and inappropriate messages.
There are currently over 800 members on the m.t.a-i.c. list comprised of air
cargo carriers, forwarders & shippers on-line. For more info, send e-mail to
moderator Michal Douglas
NCBFAA Is Working For YOU..............with FAA officials to eliminate the shipper certification/security requirements on grounds that they are meaningless and impossibly burdensome. Support our NCBFAA......and write to your Congressman........NOW.
1997 Aircargo Internet Symposium & Exhibition?...........parties
interested in suggesting topics , moderating sessions, presenting audio visual
presentations or attending should contact Martin Brennan at
Emery Worldwide Goes Argentine............as it replaced the agent Saint Germain and set up its own Buenos Aires office at a cost of US$2M. With an additional office in Chile, its Latin American business generates a turnover of US$86M.
Intra-Asia Moves...........our sources suggest considering Kitty Hawk Air Cargo at DFW for intra-Asia cargo contracts. B727s in addition to domestic opns.
OUR "C" Section: FF World Ocean News
Industry Ponders P & O - Nedlloyd Merger...........as other lines worry that uncertainty over the future of the main container consortia may further depress freight rates. None of the other lines are said to have known anything about the planned merger......before it was announced......which will create the new carrier .........operating 112 ships and 540,000 TEUs, and with 224,000 slots......the most standing slots. The new line is predicted at 2.3 million TEUs annually, making it 3rd in the world along with Sea-Land Service Inc. P&O-Nedlloyd will have 8,000 employees, with 1,400 jobs being eventually cut. Royal Nedlloyd will pay US$175 million to P&O Containers to equalize share holding. P&O, in the Grand Alliance, and Nedlloyd, in the Global Alliance, say they will honor existing commitments but few in the industry doubt the merger will eventually lead to another major shake-up in container rates. [Note: This story was the subject of our note to the special bulletin members of The Cargo Letter within an hour of the announcement]
Taiwan Reconsiders...........and is said to soon approve movement of foreign vessels between Chinese & Taiwan ports. The approval is said motivated by interest in protecting the Taiwan market and was prompted when foreign flag vessels such as from France and Germany began to by-pass Taiwan ports. U.S. operators had similar plans.
Iraq Problem Sends No Ripples.........as tensions with Iraq are said to pose little concern to shippers in the Gulf, one of the world's busiest waterways. Industry officials say insurance risk premiums are unchanged
TWRA To Allow FAK Discounts..................as the 11 shipping lines of the Trans-Pacific Westbound Rate Agreement (TWRA) are said to allow discounts under their service contract program to shippers of "Freight All Kinds" (FAK) cargo in a bid to attract mixed cargo. TWRA's managing director says the lines acted because FAK cargo is an important growth segment of the westbound market. He says, "We want to attract & retain a major share of that small shipment business''.
Dry Canals For The Americas?...................as the possible opening of rail/road links in Nicaragua & Honduras has renewed concern for the future of the 100-years old Panama Canal. Nicaragua has contracted an Int'l consortium to carry out a feasibility study for the construction of a new railroad network. Honduras is studying building a similar project between Puerto Castilla, on the Atlantic, and Puerto San Lorenzo, on the Pacific, with costs estimated to be US$300M less than the Nicaraguan project. With CTNR traffic representing less than 5% of cargo through the Panama Canal every year, or only 4% of all commodities that are transported by sea worldwide .......experts doubt that any new world transport route should be expected. Panama points out that since 1850 it has had a railroad (turned over in concession last month to a Hong Kong company) that unites both oceans in 4 hours less than that projected for the Nicaragua system. [The canal and the six U.S. military bases in the Canal Zone will pass into Panamanian jurisdiction on Dec. 31, 1999, according to the treaties signed in 1977.]
OUR "D" Section: The Forwarder/Broker World
-- by Robert Conway, Esq.
with Michael McDaniel for The Cargo Letter
SYDNEY 19 Sept -- As transport links between South East Asia and the world have grown dramatically, importers and exporters are faced with a baffling mix of different languages, business cultures and legal systems. Facing these obstacles can often be the most significant challenge for a transport & trade organization.
Not surprisingly, laws applicable to ocean moves vary from by country. This article will highlight some of the more important points to bear in mind for YOUR operations in S. E. Asia. Traders & their transportation providers need to know what law applies, how the courts deal with B/L clauses, which courts can hear disputes and what limitations are provided for damage to cargo. Although shipments to South East Asia are generally governed by the law of the exporting country, shipments from S.E. Asia are generally governed by local law.
1.) Hong Kong: The format & operation of Hong Kong's legal system after its July 1997 return to China remains uncertain. At present the Carriage of Goods by Sea Ordinance No. 104 of 1994 applies the Hague Visby Rules to all shipments ex-Hong Kong. As one of the most crucial jurisdictions for shipping disputes, the H.K.courts are experienced in dealing with shipping cases decisions tend to be in line with current British & American maritime law. H.K. courts have also followed the British courts in deciding that they have a discretion on whether to enforce jurisdictional ("place of suit") clauses. The courts can hear disputes involving shipments from other countries even though the law they apply will be the law of the country of export. The applicable per package damage limitation is 666.67 SDRs ("Special Drawing Rights" at about US$1.30 each right) per package and 2 SDRs per kilo.
2.) Indonesia: The courts are based on the Dutch legal system with laws from the maritime code of its Dutch colonial rulers. Indonesia has not adopted the Hague or the Hague-Visby Rules. Unless the B/L specifies that a particular law will apply, Indonesian law will apply to shipments both into & out of Indonesia. Generally, since most B/Ls incorporate the Hague, Hague-Visby, or the American COGSA Rules, these will be the applicable law. When Indonesia gained independence from the Netherlands in 1945, the existing package limitation of 600 Dutch Guilders was simply converted to 600 Rupiahs, today worth about US$0.26........unless a different rate is specified in the B/L. There has been no update of Indonesian maritime law since 1945, although changes are perpetually mooted, but never happen. In practice, the Indonesian courts are rather more flexible in their interpretation of the damage limitation, and can usually find ways around it to enable a more equitable award to the claimant.
3.) Malaysia: This legal system has been influenced by the British and in many respects is not very different from Australia and the U.S. The Carriage of Goods by Sea Ordinance of 1950 applies Hague Rules to all shipments ex-Malaysia. Courts have tended to make decisions in line with leading maritime jurisdictions, particularly the U.K. British, American & Australian decisions are likely followed on the questions of jurisdiction. Shipments to Malaysia will generally be governed by the law of the exporting country, but can be heard in local courts. The damage limitation is L100 per package in accord with the Hague Rules.
4.) The Phillipines: Here the Hague Rules are incorporated into maritime law. However these Rules usually apply only to shipments into the Philippines. For shipments ex-Philippines, the cargo damage liability is determined by the law of the destination country. A Philippine court is likely to apply Philippine law to any dispute over goods shipped from overseas to the Philippines. In accordance with the Hague & COGSA Rules, the applicable damage limitation is US$500.00 per package.
5.) Singapore: The Carriage of Goods by Sea Act 1972 applies the Hague Visby Rules to all shipments from Singapore. Singapore's British-influenced courts have tended to follow British maritime decisions. Singapore's role as a transport hub for the region makes it one of the more important places in which shipping claims are heard in this region. The courts are experienced in dealing with shipping claims. Disputes over shipments to Singapore will generally be governed by the law of the exporting country, but can be heard in Singapore courts. The damage limitation for shipments from Singapore is similar to that for Hong Kong.
6.) Thailand: Since February 1995 shipping claims to and from Thailand have been pursuant to the Carriage of Goods by Sea Act (1991), although exports from overseas will generally be governed by the law of the export country. The law combines principles from the Hague Visby & Hamburg Rules without adopting or ratifying either. The damage limitation under Thai law is the higher of 10,000 Baht per package or 30 Baht per kilo...or the B/L. One US dollar is currently worth approximately 25 Baht.
7.) Vietnam: This legal system is currently being modernized and a new commercial code is being drafted. The legal system is not as developed its counterparts in the region. The previous maritime laws, based largely on the laws of the Soviet Union and, to a lesser extent, of France, in many instances are identical to provisions of the Hague Rules. The new commercial code, which will apparently incorporate new maritime laws, is expected to be similar to those of Vietnam's fellow ASEAN members.
Conclusion: Freight forwarders & shippers dealing with S.E. Asia face several very different legal systems in the region, each reflecting the level of economic development and history of that country. It is clear that, to succeed, YOU must be fully prepared. Part of that preparation clearly includes a careful study & analysis of markets & products, and an understanding of the legal aspects of trade......particularly concerning YOUR exposure for damage to cargo. It is not only the manner in which a legal system approaches problems, but the issues a legal system believes important which determine how cases and disputes will be resolved. This can lead to results and decisions very different to those expected.......and often to YOUR detriment. Absent an understanding of the legal systems for these most significant regional trading partners.......there can be exposure to potentially more problems than YOU realize.
[Robert Conway, Esq. is a partner in
the firm of Conway & O'Reilly, transportation attorneys at Sydney,
OUR "E" Section: FF in Cyberspace
We are limited by space in this edition, but suggest you visit................
Asian Business (A 30 year old Asian business weekly magazine aimed at Sr.
Port Authority of Thessaloniki (an important port in S.E. Europe)
http://hermes.civil.auth.gr/port/port.html [an error occurred while processing this directive]